The Cali Muni Disaster

Item A:

Illegal immigrants can qualify for in-state college tuition, court rules

Critics say the California law that state Supreme Court justices upheld conflicts with a federal ban on undocumented immigrants getting college benefits based on residency. An appeal to the U.S. Supreme Court is expected.

Los Angeles Times

November 15, 2010

By Maura Dolan and Larry Gordon

Illegal immigrants who graduated from state high schools can continue to receive lower, in-state tuition at California's public universities and colleges, the California Supreme Court decided unanimously Monday.

The ruling is the first of its kind in the nation. California is one of 10 states that permit undocumented immigrants to receive in-state tuition, which can save them $23,000 a year at the University of California.

"Throughout the country, the California court decision will have reverberations," said Daniel J. Hurley, director of state relations and policy analysis for the American Assn. of State Colleges. He predicted that it would discourage challenges to similar policies in other states.

Item B:

Oh Boy, California Munis Are Getting Crushed Again Today

The Business Insider

Nov. 15, 2010

By Joe Weisenthal

This is getting scary. Following a week of utter drubbing in the muni, California bonds are getting crushed today. The PIMCO California Municipal Income Fund is down 3%.

There's something extremely PIIG-like about the speed of this collapse right now.

Bear in mind that California has at least $12 billion in fresh auctions this week.

Cali Munis

Now, I don’t necessary think that item A directly caused item B, and I certainly don’t think A is the only factor that led to B; however, this pairing of news stories proves an important point.

As I mentioned in my September piece “Obamageddon,” on the Treasury’s perverse need to heard investors into government debt, your typical politician or political “strategists” essentially believes that government action is a matter of will power -- “we" haven’t fully provided for Mexican migrants, say, or democratically liberated the Muslim world, or what have you, because “we” haven’t wanted to hard enough, or “the public” has been deluded or distracted. Ergo, "In this time of economic uncertainty, we must secure our future through the education of our children, especially the most vulnerable."

Dreams of a universal welfare-state are getting smashed by the reality of funding it.